Figure 1
to Figure 6 show in line charts the calculated cash conversion cycle for each of the six companies over the last twenty years. The maximum of such difference percentage over 20 years is reported on the chart.
Source publication
In the present study, we attempt to investigate the information validity of an important financial metric, the cash conversion cycle (CCC.) A survey of scholarly papers and textbooks reveals that multiple methods to compute the CCC components are employed. Based on a relatively large dataset for six public companies, we explore two of the different...
Citations
... At the same time, SFC (working capital management) is crucial to maintaining the supply chain's flow and optimizing the chain's working capital (Marak & Pillai, 2018). The goal of CCC management is to reduce the time required to collect cash from accounts receivable while also lengthening the time needed to pay off a debt to reduce the potential financing cost or opportunity cost (Tan & Tuluca, 2019). The CCC approach encourages managers to consider end-to-end supply chain costs to optimize firm value. ...
The idea of supply chain finance (SCF), often called "working capital management", is to optimize the flow of funds across the entire supply chain in businesses, theoretically enhancing supply chain participants' efficiency. This study aims to investigate if the relationship between supply chain finance and firm performance is consistent across industry sectors. The sample includes businesses that were listed on the Stock Exchange of Thailand (SET) between 2016 and 2020. The study compared 64 firms in the agro-industry with 668 firms from all SET industries. The annual financial report (Form 56-1) and data from the SETSMART database were mined for source data. Though the multiple regression study found a substantial positive relationship between SCF and firm performance for the agro-industry, it was not consistent across all other industries. The results revealed a significant positive relationship between SCF and firm performance. This research thus assists in understanding how companies listed on the SET manage their financial supply chains. The listed companies may apply the findings to improve their performance through effective working capital management. In addition, governmental agencies can use the results to develop policies that support effective financial supply chain management for all supply chain participants.
... Bloomberg is a well-known financial data provider whose real-time and historical data are widely used by traders, financial analysts, fund managers, as well as researchers. (Tan & Tuluca, 2019). One notes that Bloomberg computes the turnover ratios in a more precise way than the textbook formulas. ...
Research Question: What is the relationship between a company's liquidity and profitability? Motivation: There are two theoretical views in the literature regarding the relationship between liquidity and profitability: one view is that there is a trade-off between the two where too much liquidity decreases profitability, while the other view is that liquidity and profitability are positively correlated. Extant empirical literature, studying larger data sets, does not give a definitive answer to this question as both views have supporting evidence. This research attempts to investigate the reason(s) for such an inconsistent result. Idea: We use the Cash Conversion Cycle (CCC) as measure of liquidity and the Economic Value Added (EVA) as measure of profitability to assess the relationship. Data: The present study uses a large dataset of select S&P 500 sectors and their component companies for a period of twenty-two years extracted from Bloomberg. Tools: We use Python programs to analyze the panel data set with a series of pooled and fixed effects OLS regression models. Findings: The nature and magnitude of the relationship between liquidity and profitability can be positive or negative, statistically significant, or not-the relationship is company specific. Contribution: This study examines the relationship between liquidity and profitability for a wide array of S&P sectors and their component companies. It identifies the relationship for the large S&P 500 set, sector sets and individual companies. The research provides empirical evidence that confirms that the relationship between liquidity and profitability could be positive or negative. The result depends on the data set investigated. For the larger S&P 500 Liquidity and profitability: Not a "one size fits all" proposition! Vol. 22, No. 1 43 data set it might appear that the relationship is negative. However, at sector and company levels the results are mixed.
تهدف هذه الدراسة إلى التعرف على أثر التخطيط المالي الاستراتيجي على قيمة المؤسسة، وذلك باستخدام التقارير السنوية لشركة المراعي (2018-2022)، وبالاعتماد على المنهج الوصفي التحليلي. أظهرت النتائج أن التخطيط المالي الاستراتيجي يلعب دورًا بارزًا في رفع قيمة المؤسسة، إذ تبين أن الشركة تتبع نهجا واضحا وتحقق أداءً ماليًا جيدًا، وفي ذات السياق نجد أن نتائج EVA توضح أن المؤسسة حققت قيمة مضافة لحملة أسهمها. This study aims to identify the impact of strategic financial planning on firm value using the annual reports of Almarai (2018-2022). Results indicate a significant role of strategic financial planning in increasing firm value. Almarai demonstrates a clear approach and achieves strong financial performance, as supported by EVA results.
A company needs sufficient non-current assets and current assets for the successful running of the business and maximization of the wealth of the firm. Especially, in the short-run current assets or working capital management plays an important role in the success or failure of the firm and its impact on its profitability of the firm. This article aims to examine the impact of working capital management on the performance and as well as the market value of companies in the logistics industry. This study used the fixed effect panel data analysis with a data set covering six logistics companies listed on the Bombay Stock Exchange, India for the period 2013-2022. To estimate the relationship between working capital management and the performance of companies used Return on Assets (ROA), Return on Equity (ROE), and Market value to Book value (MVBV) as dependent variables in the research models. The main results indicate that the positive relationship between working capital, market value, and profitability is not very clear. Logistics companies' sales are negatively associated with MVBV and ROE of logistics companies. The cash conversion cycle is found statistically not significant, and the relationship between CCC and profitability is negative. Overall, of the study, it is concluded that working capital has an impact on the profitability of logistics companies in India.
Cash Conversion Cycle (CCC) is a crucial tool that influences the firms’ short-term requirements. CCC affects the liquidity requirements of every company, every nature of the business, and every size of the business. In this setting, the present research explores the different aspects of CCC and its influence on profitability related to non-financial companies of the S&P BSE (Bombay Stock Exchange) SENSEX Index in India during 2006-2020. Investigating the factors that affect the CCC and statistically significant impact on firms' profitability across the nature of the business and size of the business is the main focus of this research. The results of this research that significant negative relation observed between CCC and profitability of the firm in more classifications (Teruel & Solano 2007, Garcia 2011, and Nobance et al. 2011) and shorter length of cash conversion cycle increase the profitability of the firm (Manyo 2013 and Ajanthan & Kumara 2017). It is also concluded that this research that results would differ in different nature of the business (Padachi 2006) and different size of the business.
Keywords: Cash Conversion Cycle, Nature of the Business, Profitability, S&P BSE SENSEX, Size of the Business, Working Capital.
Cash Conversion Cycle (CCC) is a crucial tool that influences the firms’ short-term requirements. CCC affects the liquidity requirements of every company, every nature of the business, and every size of the business. In this setting, the present research explores the different aspects of CCC and its influence on profitability related to non-financial companies of the S&P BSE (Bombay Stock Exchange) SENSEX Index in India during 2006-2020. Investigating the factors that affect the CCC and statistically significant impact on firms' profitability across the nature of the business and size of the business is the main focus of this research. The results of this research that significant negative relation observed between CCC and profitability of the firm in more classifications (Teruel & Solano 2007, Garcia 2011, and Nobance et al. 2011) and shorter length of cash conversion cycle increase the profitability of the firm (Manyo 2013 and Ajanthan & Kumara 2017). It is also concluded that this research that results would differ in different nature of the business (Padachi 2006) and different size of the business
